2000-02-04                     House Journal                      Page 2094
HB 337                                                                       
HOUSE BILL NO. 337 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
"An Act relating to claims against permanent fund dividends to                
pay certain amounts owed to state agencies and to fees for                     
processing claims against and assignments of permanent fund                    
dividends; and providing for an effective date."                               
                                                                               
was read the first time and referred to the State Affairs, Judiciary, and      
Finance Committees.                                                            
                                                                               
The following fiscal note applies:                                             
                                                                               
Fiscal note, Dept. of Labor & Workforce Development, 2/4/00                    
                                                                               
The Governor's transmittal letter dated February 2, 2000, appears              
below:                                                                         
                                                                               
"Dear Speaker Porter:                                                          
                                                                               
Some state agencies are currently allowed to seek from individuals             
overdue payments of money due the state through a simple                       
administrative collection of permanent fund dividends.  But most state         
agencies still need to use a time consuming and costly court action to         
attach an individual's permanent fund dividend.  It makes sense for all        
our state agencies to have access to this "fast track" method of               
collecting from a person who receives a permanent fund dividend                
while in arrears with payments lawfully due to the state.  This bill I         
transmit today accomplishes this change in law.                                
                                                                               
Examples of agencies now able to attach permanent fund dividends               
with a simple administrative action include the Department of Health           
and Social Services, for reimbursement of certain court-ordered                
treatment, and the Alaska Commission on Postsecondary Education for            
student loans in default.                                                      
                                                                               
But the Department of Labor and Workforce Development, for                     
example, must file a small claims court action or seek criminal                
prosecution to recover overpaid unemployment insurance benefits and            
fraud  penalties.  Partly  as a result  of this  cumbersome  method, the       

2000-02-04                     House Journal                      Page 2095
HB 337                                                                       
department estimates the state is owed $4.5 million in outstanding             
benefits received by fraudulent means, $3.6 million in statutory               
penalties, and $1.6 million for overpaid benefits.  Not only will this         
bill increase recovery rates, but because these owed benefits are paid         
by employer taxes, it will reduce employer tax rates within the state.         
                                                                               
                                                                               
A state agency would not be required to use these new procedures for           
collection.  Any agency that elects to use the new procedures would            
be required to notify the individual of the claim with a fair opportunity      
for a hearing at which the individual could contest the agency's claim         
to the permanent fund dividend.  If a hearing is not requested or the          
claim is resolved in favor of the state agency, the agency may collect         
the money from the individual's permanent fund dividend without                
filing a court action.                                                         
                                                                               
                                                                               
Passage of this measure gives state agencies an additional tool to             
recover money that is lawfully owed to the state under existing state          
laws.                                                                          
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"